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A little earlier this week, a good friend said to me: Hey. I’ve missed you writing on TopFermented. I figured with all of these acquisitions that you’d have something to say.

Sure, said I, I have a lot of thoughts, but not only am I busy as hell with the brewery these days, I also feel like I need to be a little more delicate with my words as President of the NC Craft Brewers Guild.

Why? Well, because it looks a lot more like a signal than all of the others. This brewery was first. Fritz Maytag rescued Anchor from closing its doors in 1965 and effectively became the first craft brewery. It’s been doing what we’re all doing for longer than anybody. It was the model for so many breweries over the past 50 years.

On the other hand, it’s easy to forget that Fritz Maytag sold Anchor to Griffin Group, owners of BrewDog (hah, punks, sure thing fellas) and Skyy Vodka, way back in 2010, so no big shock that it was on the sale block as mergers and acquisitions are heating up in the beer industry. You’ll see in the article that Keith Greggor, of the Griffin Group (and CEO of Anchor) said that “the move was a year in the making and the result of speaking with ‘many, many’ larger breweries all over the world to find the right fit.”

In fact, none of it is really a shock. Many people in the industry are in the same space that Fritz came to in 2010: In need of an exit strategy. They’ve put their time in, they’ve grown their companies, they’ve done well by their employees, they’ve brought the brand they built into the world of success. What else are you supposed to do? Just close shop and lay everybody off? Sell and go enjoy your grandkids, for gods sake. Fritz was a pioneer in exit strategies just as he was in many other aspects of the craft industry. He beat most everybody there by years.

Still – it feels like a larger symbol – this beacon of independence, innovation, and entrepreneurship is now just another brand swept up in the great brand homogenization of the past few years. Like it or not, it’s part of an international corporation that will benefit by dragging sales away from small, local, independent producers. From now on, when you buy an Anchor beer, that buck will ultimately stop at Sapporo Breweries, Toiso, Eniwa, Hokkaido Prefecture, Japan.

So, you know, support your local international brewery. Or just buy what tastes good, I guess.

Ultimately, that’s the most disappointing part of it to me. Every time one of these happens, a big wave goes through the craft industry in which a bunch of people who say: “Who gives a shit? If it tastes good, who cares who makes it?”

Well, I do.

And, sure. I am biased. The vast majority of breweries who will have M&A as a viable exit strategy look very similar to the ones that have already been acquired: Established, 15+ years old, growing, with a good on-site presence and wide distribution. The vast majority of breweries who will suffer for it look a lot like mine: Tiny, hyper local, battling with congested distribution markets and a variable tourism trade after 3 – 7 years of being open with 3000 new breweries behind us eagerly waiting to take our place. It sure as shit matters to me.

It’s difficult to see our forefathers and our pioneers – our independent giants and captains of industry – slip away from us. It feels like a betrayal to the innovative attitude that seduced all of us 2nd, 3rd, and 4th rounders into the industry in the first place – the dreams of working hard with your own hands to make a cool product has gotten lost in the fast paced factory. It hurts to see someone you idolized as a successful entrepreneur and businessman just become another suit and tie.

But it’s what the future holds for our industry.

On the wall of my production floor here at Mystery, there’s a quote from Fritz Maytag that reads, “Beer doesn’t make itself by itself. It takes an element of mystery and things unknown.” Most people think it’s how I named my brewery. It isn’t. But it speaks to me enormously about the product and the reason that many of us are in the industry itself. It’s more than just a business to a lot of us, it’s our way of life, it’s our passion.

So, this week, I’ll go buy my last Anchor Steam. I’ll hoist it in memory to the innovative business that Fritz Maytag once built, and I won’t look back, just like I’ve done with so many breweries lately. Then, I’ll get back up on my brew deck and pour my heart and soul in.

I’ll admit – I don’t get it. I feel like they’re pandering to an audience that they’re not likely to lose. I’m not sure if someone thinks that this will draw in consumers from some heretofore unknown market segment or if someone just thought it was cool (and if it’s the latter, then, fair enough). The most thought that I’ve put to it beyond that was, “How did they get TTB approval for that?”

I guess there’s nothing necessarily BAD about it. But you’re not supposed to have anything on the label that suggests a government endorsement nor put anything on the label that’s designed to confuse or misrepresent the product to the consumer and, well, here’s the label:

I don’t know about you, but this seems to represent that Budweiser is American which I would consider to be confusing to the consumer. And, look, it started here, but it’s clearly moved on and doesn’t really need us anymore. And E Pluribus Unum? One, out of many. I guess it does make a lot of sense for the King of Mergers and Acquisitions.

Anyway, that’s about the last I thought about it until a couple of weeks ago when I was preparing a lunch-and-learn about label approval in NC. I always use Anheuser Busch as one of my examples because they just have SO many brands, and they tend to represent them legally differently than most small breweries.

And that’s when I noticed this:

Let me tell you a story about this picture. When you register a brand in North Carolina, you need to turn into a label approval form. On that label approval form, you designate the Supplier (Anheuser Busch), the Brand – which designates distribution rights, the Product Description (Pale Ale, etc.), and a Fanciful Name (where most small breweries put the name of their beer).

Anheuser Busch generally lists their individual Brands in the Brand field instead of a Fanciful Name, which is a legitimate practice. If you search for Budweiser, you get 75 different results.

It means that they have the ability to control distribution rights on each individual brand (which is really useful if you’d like the ability to punish or reward an individual distributor). So, okay, no problem, so I searched for America.

Fun, right? Now, I’m no alcohol lawyer, but this suggests to me that America is being distributed illegally in North Carolina. So, I took my time and filed a little bit of paperwork, so now if you search in public records, you can find this:

That’s why it’s my pleasure to announce that just in time for America’s birthday, you can find America, a Ridiculously Patriotic Extra Pale Ale available in cans from Mystery Brewing Company. They’ll be available July 1 at our Public House in Hillsborough (and it’s really delicious).

(high res if you click)

And hopefully I don’t get sued off of the planet. In the meantime, I’ll be drinking this baby on July 4. Happy birthday, America.

Weird article, right? I know. I just got back to my hotel room. I’m in between sessions on the Saturday of GABF 2013. I’ve had about 3 hours of sleep and my mouth still kinda tastes like whiskey (and a little like shitty cigar), so I’m definitely not at my finest. With all of that, you could probably construe this article as me being a sore loser. In reality, writing is my way of dealing with things; this is a lot closer to therapy for me and you just get to read it.
Lucky you.

I’m disappointed. I can’t imagine any brewer who doesn’t get a medal not being disappointed. After all, we don’t get into this business to make mediocre shitty beer, and if I didn’t think my beer was fantastic I probably shouldn’t have started in the first place. You spend a LOT of money and a lot of time getting out to this thing, and it’s an exhausting, insane, shitshow of a week. You kind of want to get something out of it.

I came to the GABF this year knowing that I was at pretty long odds to pick up a medal today. Here’s why:

We’re pretty new. We’re still getting a lot of our processes down. And while I’m pretty confident in our ability to make great beer, I’m not 100% on our process for shipping a handful of bottles across the country for a competition. Let’s face it – we’re just getting into bottling now. We bottled these beers on a 90 degree day, put them in a cardboard box and shipped them overnight to Colorado. That beer sat in the back of a hot van, shook its way onto an airplane somewhere, it flew in a cargo container across the country before getting into another truck, hopefully making it there without breaking, and then finally, sitting in a warehouse for a month or more under unknown conditions.And, yeah, look, I know. A LOT of other breweries have the same thing going on, and I’ll get back to that later. I’m saying – I don’t know how my beer was when it got to judging because I don’t know how good our process is for doing this. We made it up.

We’re seasonal only. The beer we sent into the competition was the beer that I was pretty sure we’d have around when we had to send samples into the competition. It’s not like I had flagships to send.Funny story: Out of all of the beers we’re pouring at the festival, only 2 are currently available on the market in NC and those two are just a little left over from our summer brands and will soon be gone. We’ve moved on. It’ll all be back next year, but by in large we came to CO to pour beers that we no longer have in stock.

We’re not style brewers. Frankly, I don’t give a rat’s ass if my stout meets the perfect metrics of a Foreign Extra Stout. I made it that way because it tastes good. But in what category do you put a Foreign Extra Stout made with Lemons and Lemongrass? Herb and spice? Experimental? We put it into fruit beer because why the hell not? What about our wheatless Berliner Weisse, or our English-Style Black IPA? We’re just not built for competition. I never have been as a brewer, the GABF will be no different.

I’m still pretty disappointed.

It’s nice to have people come up to the booth and tell us that the beer is great. It would be awesome to have a piece of hardware. Shit happens, eh?

Here are a couple of observations that I’ve been going over in my head:

The majority of the winners were states that were really close to the GABF. Makes you wonder a little bit about how much travel effects the beers that are getting judged. I mean, look, you’ve got two CO brewers and a CA brewer that just opened up shop in NC so that they could avoid shipping beer across the country because of the toll travel takes on the product. Funny that we should be sending beer back the other direction and expecting it to be great, isn’t it?But hey – I don’t want to take anything away from the winners – I tried quite a few of the winning beers and they were fantastic. On the other hand, I also had some fantastic stuff from breweries outside of the western 3rd of the U.S., too. It would be really interesting to see the GABF on the East Coast sometime to see how beers from CO and CA made the trip, or to see if there’s a different judging pool in a different geographic location.

There are 140-something categories in the BA Style Guidelines, but there are 84 medal categories. That means that a lot of those sub categories are getting mixed together, which means that if you have something fairly rare or special that you’re putting into one of the sub categories, at some point you’re getting lumped in with beers that are potentially very different than what you entered.I know how judging normally works, and I know that GABF is fairly unique, but if I got this right it should go something like this: Everything gets tasted and scored. Beers that score over X are all put in a medal round. Scores from X – Y are bronze, scores from Y – Z are silver, scores over Z are gold (which is why there are sometimes categories without a particular medal awarded). Beers are are in those ranges get tasted again in a “best in category” ranking and whichever one wins in that mini competition gets the medal. (Someone please correct me if I’m wrong, this is how I understand it.)

Now, let’s pretend your brewery made a Gratzer, which is a low alcohol, delicate, light, smoky Polish style beer. It’s got it’s own category (27E!) and style definition. In judging, however, it falls under “Smoke Beers” which is a huge category with a lot of BIG beers in it. Even if your brewery made a really fantastic gratzer and it was considered for a medal, if it went up against – I don’t know – a Smoked Russian Imperial Stout, then your delicate little gratzer gets really enormously overwhelmed in a tasting. And I think this is true regardless of how good the judges are. Judging is pretty subjective and pretty tiring to the palate, especially when you’re tasting really big aggressive beers like.. well… smoke beers. I’ve judged a lot of competitions and I know, too, that when it comes down to final rounds it can often be a matter of a subjective whim of a judge.

I’m not saying this happened. But I do feel like a lot of my beers are pretty delicate, and it’s what makes them good. They’re never going to stand up against giant smack-you-in-the-face flavors, and that’s why we’ll never do well in competition, but I think that blending categories together (out of necessity, I know) exacerbates that problem.

The solution is for me to lower my expectations.

And that’s it – for now. Until someone is douchey to me in the comments and tells me that my beer sucks (you’re wrong).

I’ve been a Red Sox fan for a long time, and so like I’ve been so used to saying in the past: Better luck next year. We’ll get ’em.

Congratulations to all of the breweries at the GABF – not just the ones who won. There has been some really outstanding, amazing beer. Kudos and thanks for keeping beer great.

Yesterday, we announced over at Mystery Brewing Company that, as of September 1st, we’d no longer be offering refunds on growlers. Since this decision looks like it’s coming a little out of left field, and because I’ve always wanted this blog to be a little behind-the-scenes-ish for the brewing industry, I thought I’d take the time to lay out my reasoning behind why we’re doiing this.

Reason #1: Cleaning Growlers Sucks

It’s incredibly time-consuming and incredibly wasteful. To be fair, we don’t have a top-of-the-line growler cleaning machine, but that’s primarily because – as near as I can tell – one doesn’t exist. Here’s how we clean growlers right now:

Remove the growler from the box that it was returned in.

Remove and discard the cap, remove any stickers, price tags, or anything else that has been affixed to the growler.

If there are stubborn stains, put the growlers to soak in a hot caustic solution to remove those stubborn stains, flies, etc.

If there are cracks, chips, etc., immediately discard the growler.

After the caustic rinse and/or soak has been completed, each growler is rinsed with sanitizing solution to both neutralize the caustic and get it ready for fills. If you’re not filling as you’re cleaning, each growler is then re-boxed upside down to allow liquid to drain.

THEN when we fill them we re-inspect them (to make sure nothing’s happened inside, or someone hasn’t missed something earlier in the process).

Cleaning growlers is incredibly time consuming. Through 2013, cleaning growlers has been almost a full-time job at Mystery. It’s our estimate that we spend up to 30 hours of employee time every week cleaning growlers on an average week. If you count the amount of money that goes toward cleaning chemicals, water, caps, tape, and growlers that we just plain have to throw away because people are disgusting, on top of employee time, then every time we get a growler back from the marketplace that we need to clean, our profit on that original fill has been completely wiped out. If we were to get that same growler back again (which we have no good way of tracking), we would lose money. Losing money is not a good way to run a business. So the decision is partly an economic one.

Could we cut corners? Sure. But then our growlers would be gross. That’s also not a good way to run a business. Particularly one that relies on repeat purchases.

Reason #2: Growler Returns are a Logistical Nightmare

Getting growlers back from stores isn’t efficient or easy, either. Rather than just making a delivery to a store, you are now requiring a driver to go through the exercise of collecting and transporting empty bottles. Among the issues here:

Store employees often don’t sort growlers by brand, requiring a driver to go through box after box of empty growlers in order to make sure that they’re not paying a refund out for a growler that they’re not supposed to be picking up.

Since growlers often come back from consumers dirty, they often attract pests (normally thousands of fruit flies). Because of this, many stores keep growlers in locations away from everything else – at the bottom of a flight of stairs in the basement, locked in a storage shed outside the store, or even in multiple locations around the store.

Empty growlers rattle around in a truck much easier than full growlers. They’re much more likely to break when they’re empty because they don’t have mass keeping them in place.

The cardboard boxes that we use deteriorate as they go from warm to cold environments or dry to wet environments or any combination thereof. They break, they rip, the tape falls off, they have three or four different brands on them. Sometimes stores throw them out altogether and there is no good way to pick up empty growlers except for “loose.”

The crux of the issue here is that having a driver pick up empties adds a significant amount of time onto their route, and often adds an extra level of training and complexity, so it’s also inefficient and costly to the distributor.

Reason #3: Retail Growler Fills are now legal in NC

This summer, the North Carolina Legislature passed a law allowing retail growler fills in North Carolina (Session Law 2013-76). While the rules for this are not yet in place and it is not currently legal for retail establishments to fill growlers, it will be very soon. We anticipate that this will greatly reduce the amount of growler sales we make across the board.

Simply put: If a store can buy a keg from me and fill growlers with it, thereby making a much larger profit, why would they buy pre-filled growlers from me? Sure, some will, but many will not. Among the largest proponents of the retail growler law are Total Wine and Whole Foods, both of which have growler filling stations in other states, both of which are enormous potential customers for us when it comes to retail packaging. We’d rather sell them bottles than not sell them growlers. Or, better yet, sell them bottles and kegs so they can fill growlers themselves.

Reason #4: We’re Moving Into 22 oz. Bottles

And there it is: We’re moving into the bottle market. We’re interested in going into smaller packages that have a lower cost for us (growlers are crazy expensive), more portability, and lower cost in the marketplace. We’ve been told that in all cases in the local market, when a brewery has gone from offering growlers-only to growlers and bottles that their growler sales have dropped precipitously.

Reason #5: We Just Don’t Want To

We, the staff at the brewery, find growlers to be incredibly cumbersome and unpleasant.

Cleaning growlers is one of the grossest jobs we have. It’s full of old stale and rotten beer smells, mold, flies, and broken glass. We spend a lot of time with vinegary beer splashing on our clothes and ourselves, we spend hours wearing layers of protective gear as we clean them to keep chemicals off of us, or keep broken glass off of us. We spend hours scraping price tags and old stickers off of them. It’s just not nice. If we can make a more pleasant working environment while getting beer out to people in a better and more efficient way, we absolutely will.

In Summary

Growlers have been an important part of Mystery’s growth. In our first year, growlers made up a significant amount of our income. They have been an important part of getting our brand into the state and into the consciousness of state’s beer geek population, but we feel that with the combination of process problems inherent in growlers alongside the future of the marketplace (as we see it), that our time with them as a packaging option in bottle shops and grocery stores is coming to a close.

We’re excited to get smaller and better packaging out and we think everyone else will be excited to see it, too.

Since Mystery Brewing Company‘s appearance on Crowd Rules in May and the introduction of our brand idea on a national scale, I’ve seen a fair amount of discussion online (and in my inbox) about our “no flagship brand” model with varying degrees of agreement or disagreement. I thought it might be a fine time to talk about what seasonal-only brewing means to us, how we do it, why we do it, and why I think that it’s the future of craft beer.

Why seasonal-only?

It’s easy: people love seasonal beers.

This idea didn’t just come fully formed into my head. Back when I attended my first Craft Brewer’s Conference, one slide during Paul Gatza’s State of the Industry presentation kept sticking in my head. I might get into a bit of trouble by pulling this slide out of an industry-only presentation, but here it is from 2013. It’s looked pretty much the same way for the past 4 or 5 years:

Taken from CBC 2013 State of the Industry presentation

Seasonal: #1.

And, yes, IPA is coming up strong because IPA, but you’ll notice that the other big climber is “Variety.” These trends look the same year after year and they read to me like this:

People are no longer brand drinkers. They’re portfolio drinkers.

It’s always amusing to me that an industry that spends so much time trying to define itself as “not industrial lager” bases its primary business model on the industrial lager model, which is the flagship model: Make one beer, make it well, make it as cheaply as possible, use other brands to keep competitors off the shelf.

There’s two obvious reasons why this model has worked so well and why it’s been adopted by the craft industry.

In the early craft market, when there wasn’t a lot of brand recognition for craft beer, much less craft brands, it was a lot easier – and better for business – to emulate the big brewery model. In the 1980s and even the early 90s, it was necessary to have big iconic craft branding to stand apart from and against the industrial lagers.

It’s the way distributors operate. Distributors are built around selling core brands and selling them well. Since distribution was key in the growth of craft across the country, craft breweries adopted the flagship model in order to move their beer.

But this isn’t your daddy’s beer industry any more and drinkers have moved on from the core brand model. A quick look at Rate Beer, or Beer Advocate, or Untappd – or even the fact that those sites exist – will show you. Very few craft fans buy one brand and drink that one brand. Drinking variety is a badge of honor, sometimes even literally.

A few years back, when I was just getting into the beer industry, I saw the results of a survey that showed that when people had a beer that they identified as their favorite – a brand that they were loyal to – they bought that beer, on average, once per month. The same survey showed that they consumed beer several times per week, and often 2 – 3 beers at a time. Some loyalty, huh?

(I really wish I could find that survey and link to it and/or see the results of those questions today.)

The young members of the drinking market – the kids just turning 21 years old – have something that their predecessors never had: vast variety. Any young drinker that walks into a beer store today is faced with not 10, not even 100, but thousands of varieties of beer. I can get 55 different pale ales at the store near my house. And that brings me to two different questions:

1) How could anybody choose just one of those without trying a ton of them?
2) With that much competition already in the market, why on earth should I make a pale ale?

If you’re a craft drinker, ask yourself these questions: When was the last time you weren’t interested in trying something new from a brewery you like? When was the last time you didn’t want to try something from a new brewery? When was the last time you bought the same beer more than a couple of times in a row?

See? It’s happening to you, too. Variety is king.

What we mean by seasonal-only brewing

Based on that information, I decided to pursue the idea of seasonal-only brewing. There were a couple of different facets to the decision. One of them was to capitalize on the fact that people enjoy variety and enjoy seasonal beers. It’s what people buy the most, and so it seemed natural that they would also buy our seasonal beers. The other was to differentiate our brands, and not just make another golden, pale, amber, porter, stout, IPA lineup, but to actually fit into the niches that were open in an already-crowded beer market.

One of the main misconceptions about our model is that we’re just flying by the seat of our pants and have no idea what’s coming next. In reality, we have a set schedule that we brew by that is based on both style and season. It works like this:

Click for a larger version of our seasonality chart.

We have four style categories that we brew in: Session, Hop Forward, Saison, and Stout.

Each season we make something seasonally appropriate within that category, and we repeat that beer each year. So, just like every other seasonal brand in the country, each beer comes out once/year, is consistent with how it tasted last year, and will be back again next year when it is again seasonally appropriate.

You can click into the graphic, but I’ll break down the styles for you here in text.

On top of that, we also do more limited seasonals, one-offs, experimental, and barrel-aged brews. Since it seems weird to call a beer a seasonal at a seasonal-only brewery, we release them in a line we call our Novella Series. Some of them are truly one-and-done. Some of them we’ll make again. Some of them are candidates for future categories as we expand. Basically, these are where we’re trying our new recipes and styles. Now that we have an operating taproom, many of these go on tap there and there only, but we still like to be able to get special one-offs into the market in keg format.

Challenges to the model

There are, no doubt, many challenges to this model. I anticipated some of those challenges, and some of them caught me by surprise.

I, like most crazy founders of things that don’t really exist, thought that the brilliance of my idea would be self-evident and that people would immediately understand what the hell I was talking about. In reality, we opened the brewery to confusion about our model and it’s still one of the most significant challenges we face (which is at least one of the reasons I’m writing this article).

As it turns out, the most common question you’re asked as a new brewery is, “What’s your flagship?” When you have an answer that’s a paragraph and not a sentence, people aren’t excited to listen and that’s because – as I was surprised to find out – most of the people who are buying beer at bars and restaurants don’t really care about beer.

I will almost definitely catch some sort of flak for that, but it’s true and, what’s more, it will always be true. You can almost definitely say the same thing about wine, liquor, chocolate, hot dogs, or any other specialty product. Because the people who are most likely making these decisions are making a myriad of different decisions and purchases, and they’re just not excited by the nuances of the brewing industry, nor should they be. They want to make an easy decision about one small facet of their operation and then get along to the next crisis in their day. Plain and simple, it’s not their job to care about the difference between your business model and the next guy’s. In many cases, beer is a set-and-forget kind of purchase. They will buy one brand until sales start to dip and then they will buy a different brand. If you go into a bar or restaurant with a brand that will go away on its own (or will appear to), then it looks to them like you’re just giving them more work.

We’ve honed our elevator speech, we’ve made charts and graphics and flyers, and we’re continually working on more ways of getting information out to bars and restaurants on a regular basis. Still, our largest challenge is defining our business to the customer in a way that they easily understand. We have a hard time convincing bars that they could just, say, always keep our stout on tap and that it creates variety in their lineup for them without any further work on their part.

The same goes for our relationship with our distributor. We’ve had a great time with our distributor, but we’ve found out the hard way that we were not providing enough information to their reps in order to best sell our beer. Sales reps fall in the same place as bar managers and beer buyers. We are just one brand in their book. If they don’t have a good understanding of what that beer is, what it tastes like, or why it changes, it’s a lot easier to sell something else. We’ve had to come back into the brewery and make changes in how we are handling information and what we’re expecting from sales. It was our assumption that beer reps working for our distributor would naturally be interested in learning more about the product and representing it correctly, but it’s a naive view of a crowded market. We don’t just make another pale ale, and if our beer is difficult for a rep to sell, they won’t sell it. After all, it’s just one small facet of their job.

Seasonal-only also contradicts how distributors are built to sell product. There is an onus in distribution to push the flagship brand of a brewery in order to qualify a retail establishment for inclusion on seasonal releases. To put it more plainly: If you, as a retailer, order a bunch of Crappy Golden Ale from Brewery X then you are virtually (but not legally) guaranteed that when Super Popular Imperial Stout comes out from Brewer X in the fall, you’ll get some. But if you don’t buy Crappy, you can kiss Super Popular goodbye. When all of your brands are seasonal, it’s hard to play that game.

Consistency is the challenge that I correctly anticipated. My feeling was that in order to get people to trust an ever-changing beer lineup, you have to make sure that the beer that’s going out is consistent within the brand and that it’s always great. Simply put: You cannot have your entire lineup change four times per year if half the beer you put out is sub-par. What’s more, the beer has to be consistent year-to-year, so that the flavor that customers loved last year is back again for their enjoyment.

We’ve put a lot of effort into making sure that we have an excellent lab and good science. We manage 95% of our own yeast propagation, we test every batch through the system for any sort of contamination, and we’re in the midst of starting a tasting panel program to make sure that flavor consistency isn’t just a decision between me and my brewer.

Why I think seasonal is the future of craft (specifically small craft) beer

All this said, I do believe that seasonality is the future of craft, and that these challenges – particularly the ones in which people don’t understand our business model – will fade away, precisely because more breweries will eventually buy into the idea.

If I were to polish up my crystal ball and tell you what I think the future of beer looks like, I think it goes a little like this:

Small craft brewers face a number of future challenges from both inside and outside craft.

The big guys are losing market share, and they know where it’s going.

MillerCoors just expanded their “craft” division. Tenth and Blake just got a fancy new building and I’m sure we’ll be seeing plenty of new MillerCoors-funded “craft” brands coming into the market. Anybody who isn’t concerned by that from a small business perspective should take a look at Blue Moon sales numbers and then taste the sours that are coming out of ACGolden’s barrels and think again.

This past year AB-InBev took what should look less like a warning shot and more like first volley in the purchase and proliferation of Goose Island. They can shore up loss of market share by purchasing and assimilating craft breweries and this act shows it. Aggressive corporate behavior and ruthless market dominance is what took them from prohibition to the best selling brand in the world and nobody should believe that they can’t, or won’t, make beer good enough to give any craft brewery a run for its money. Everybody should also remember that Budweiser was, at some point in history, a delicious, crisp, and well-made American pilsner.

These giants and their pocketbooks have considerable influence and sway with the distribution system, which most small brewers still depend on enormously without having robust protection from franchise law. Small brewers, in most cases, still play by the same rules as the large brewers when it comes to distribution because there are no exceptions for business size written into the law in most states. Unfortunately, 99.9% of small brewers don’t have the same financial sway that the makers of industrial lagers do. They are at an incredible disadvantage there.

Inside the craft industry, we’re building our own industry giants. Boston Beer, Sierra Nevada, New Belgium, and others are so far and away larger than most of the small breweries in States that it’s almost unfair to lump them in the same industry. When we talk about “the Big 3” we could just as well be talking about those three, since the three of them together make more beer than 98% of the breweries in the U.S. combined.

Regional and super-regional breweries continue to dominate the craft market through many of the same tactics used by the makers of industrial lagers: aggressive expansion and financial influence on local markets through event sponsorship. They get a pass from craft drinkers, though, because of two key reasons: 1) They’re still largely seen as small breweries (because in comparison to AB-InBev, they really are). 2) They make great beer.

However, as those companies continue to grow with a bevy of regional breweries behind them looking to follow in their footsteps, I find myself asking:

Can this country support 50+ super-regional breweries AND 3000+ small breweries? How long can we go before small breweries start going under because they can’t keep up with the big craft brands? How do I differentiate my company to allow it to survive?

I can’t play in the same space as these other breweries. I have neither the financial resources nor the desire to create a nationwide brand. What can I do to stop my company from being swallowed up? What advantage do I possibly have over any of these guys?

The answer is the same for any new small business: agility, creativity, innovation.

I’ll never be able to get my ingredients cheaper, I’ll never be able to make more beer than they can, have lower prices, have flashier advertising, or fancier new packaging. Our advantage – and the advantage of many other new breweries out there – is our small size. We can do things on a 7 bbl scale, that nobody would ever want to do on a 100 bbl system. Maybe because it’s a pain in the butt to manually quarter that many lemons, or maybe because finding a source for 500,000 jasmine flowers is unreasonable. It doesn’t matter why – it is.

The advantage to seasonality in a small brewery is that it takes advantage of what we do best: We make small amounts of really fresh beer, we make a variety of styles, we make them quickly, we make them well, and then they go away. We offer variety and exciting innovation in a marketplace that’s filled with overwhelming sameness. We offer exactly what drinkers are looking for, exactly when they’re looking for it.

Now, if only we can get everybody to understand that. Drinkers love the idea. Bars, restaurants, and distributors are following along, and soon, I hope, breweries will, too.